Barclays and four former bank bosses face fraud charges over 2008 financial crisis fundraising

  • Video report by ITV News Business Editor Joel Hills

Barclays and four individuals, including former chief executive John Varley, are facing criminal charges relating to the bank's emergency fundraising during the 2008 financial crisis.

The Serious Fraud Office (SFO), which began investigating in 2012, said the bank and the individuals have been charged with conspiracy to commit fraud and the provision of unlawful financial assistance.

How significant are the charges?

Very. They are the first UK criminal charges to be brought against a bank and top bankers over action during the financial crisis.

ITV News Business Editor Joel Hills said the stakes for Barclays and the former bank bosses "are enormous".

"If Barclays is found guilty it faces potentially eye-popping fines," he said.

"If convicted the former directors may face prison. They will want to fight hard to protect their formidable reputations and, of course, their liberty."

The emergency capital from Qatari investors helped Barclays avoid a bailout in 2008 - while rivals Lloyds and RBS were forced to rely on a taxpayer rescue - as the financial crisis sent the sector into meltdown.

The Financial Conduct Authority (FCA), which has also reopened its probe into the Qatari fundraising deal, is now understood to be reviewing new evidence that could see it reconsider a £50 million fine handed to Barclays four years ago. It has welcomed the SFO charges.

What exactly do the charges relate to?

The SFO said the charges relate to:

  • The bank's move to raise cash from Qatari investors Qatar Holding and Challenger Universal in June and October 2008

  • A $3 billion (£2.4 billion) loan made available to the State of Qatar in November 2008

Why were the 2008 investments so controversial?

The manner in which Barclays secured the investments amid the crisis in 2008 has since been mired in controversy and the subject of several investigations.

Investigators have focused on two "advisory services agreements" worth £322 million, which Barclays agreed to pay the Qatar Investment Authority.

The FCA handed out its £50 million penalty on the bank in 2013 after finding Barclays had failed to disclose arrangements and fees it paid to the Qatari investors.

Barclays contested the fine and the challenge was put on hold while the SFO conducted its investigation, but that stay has been lifted.

Greeting the announcement of the SFO charges, the FCA said: "We are pleased that this matter, which led to the stay of our own case, is now in the public domain.

"We welcome a fair and transparent hearing on the basis of the charges set out today by the SFO."

The United States Department of Justice and the US Securities and Exchange Commission have also been probing the 2008 payments.

Why was Barclays so desperate to avoid a taxpayers' bailout in 2008?

  • ITV News Business Editor Joel Hills explains why Barclays sought funds as Lord Myners recalls government's surprise

Hills said Barclays bosses acted out of "pride" in seeking funding given the bank's fine reputation but also sought to retain "control" amid the 2008 crisis.

Lord Myners, who was in government at the time of the crisis, told ITV News he and others were "perplexed" at how Barclays had raised the funding it needed.

"I remember we all looked at each other and all shook our heads," he said, though added it was welcomed at the time for relieving pressure on the taxpayer.

What is Barclays' response to the SFO charges?

Barclays has faced several investigations over the 2008 investments. Credit: PA

Barclays said it is "considering its position in relation to these developments" and said it "awaits further details of the charges from the SFO" amid a difficult time for the banking giant.

It added: "The SFO has informed Barclays that it has not made a decision as to whether it will also bring charges against Barclays Bank Plc in respect of the loan."

Why is it a difficult time for Barclays?

Barclays is also defending itself against legal action over a financier's claim to recoup £700 million in advisory fees relating to the 2008 fundraising.

Current Barclays boss Jes Staley is meanwhile facing a regulatory investigation into his own conduct after he attempted to identify a whistleblower.

Who is charged and what was their role at the bank?

Former Barclays boss John Varley is among four former bank chiefs facing charges. Credit: PA

Along with Barclays Plc and ex-bank boss Mr Varley, 61, former senior staff members Roger Jenkins, 61, Thomas Kalaris, 61, and Richard Boath, 58 are also facing charges.

Mr Varley was chief executive between 2004 and 2011 and headed the bank at the time of the fundraising.

Mr Jenkins, who has vowed to "rigorously defend the charges" after becoming the first of the four to publically respond to the charges, is understood to have played a key role in orchestrating the deal.

Mr Kalaris used to head the bank's wealth and investment management division, while Mr Boath was the former European head of financial institutions group at Barclays.

When will they appear in court?

The defendants and representatives of the bank will appear at Westminster Magistrates' Court on 3 July.

The bank, Mr Varley and Mr Jenkins face charges of conspiracy to commit fraud by false representation in relation to the October 2008 capital raising and unlawful financial assistance.

The bank and all four individuals face charges of conspiracy to commit fraud by false representation in relation to the June 2008 capital raising.